Schools Chancellor Harold Levy warned yesterday the troubled city school system is lurching toward a train wreck – and accused politicians of sleepwalking through the crisis.

“Look out, folks. There’s a train coming here. Let’s get off this track real fast,” Levy said as he touted after-school summer programs at James Madison HS in Brooklyn.

“Now it’s a matter of decision. People don’t want to move off this track; let’s understand where we’re headed.”

Levy listed a litany of problems confronting the Board of Education, including:

* Lack of a teachers-union contract, making it more difficult to hire good teachers for the fall with the current starting salary of $31,000. He said too many of the existing teachers are uncertified – and shouldn’t be in the classroom.

* Both veteran teachers and principals are retiring in droves.

* There is not enough money to bolster math instruction, programs to help immigrants learn English, and employee-training programs.

* Mayor Giuliani and the City Council allegedly shortchanged the Board of Ed by $120 million – and the state has failed to pass a budget.

“Enough is enough,” said Levy, who’s been in a tug of war with City Hall over school funding. “This is a crisis. This is a public scandal.”

Levy also stirred up a war with Staten Island.

He complained the more affluent borough gets a disproportionate amount of federal poverty funds – at the expense of The Bronx – under the funding formula.

Staten Island Borough President Guy Molinari cried foul.

“We’re not taking money from other schools,” he said. “I’m absolutely appalled at the chancellor.”

Levy’s rhetoric was so apocalyptic that observers wondered if he’s ready to quit, which he insisted was not the case.

“I’m not at the end of my rope. I’m angry. I’m not going to give up . . . I’m going to get even.”

Giuliani dismissed Levy’s criticism as the same old whining for more money – and questioned the chancellor’s management of the system’s $12.3 billion budget.

The mayor jabbed Levy for being unable to produce $20 million in promised reductions in the board’s bureaucracy.

“That may be even worse than all the overspending in school construction,” Giuliani said.

The chancellor insisted he’s not to blame if student scores don’t improve under the system’s current “shoestring” budget.